History Shows Gold’s Rally May Only Just Be Getting Started – by Elena Mazneva, Ranjeetha Pakiam and Justina Vasquez (Bloomberg News – February 26, 2020)


Even with gold at seven-year highs, there’s still room for more gains if history is anything to go by.

Prices have surged this year as haven-seeking investors pour in. Markets have been shaken by worries that the coronavirus outbreak will cripple global growth, coupled with expectations for looser monetary policy around the world. Assets in bullion-backed exchange-traded funds are at the highest ever and money managers are holding a near-record bullish bet.

Yet gold remains a relatively small percentage of portfolios by historic standards. And as investors assess the virus threat to the world’s biggest economies, it’s worth remembering that the metal’s haven qualities are especially evident during recessionary periods.

Here are four charts that show why gold’s still got room to run.

ETF Holdings

After an unprecedented 25 straight days of inflows, the total value of gold held by exchange-traded funds tracked by Bloomberg is closing in on the record of over $144 billion reached in 2012. But while bullion holdings have jumped this year, they’re still relatively low as a proportion of total ETF assets.

“There is room for further demand — particularly on the ETF side,” said Benjamin Jones, senior multi-asset strategist at State Street Corp.

For the rest of this article: https://www.bloomberg.com/news/articles/2020-02-27/history-shows-that-gold-s-rally-may-only-just-be-getting-started